SpaceX shares surged on their stock market debut on Friday, racing past the $135 listing price to touch $150 as investors scrambled for a stake in Elon Musk’s vision of space, satellite and AI dominance.
The first-day pop, while shy of some of the more feverish predictions, caps the biggest flotation in stock market history and underlines the extraordinary appetite for a company that has come to embody the commercialisation of space. The offering was reportedly at least four times oversubscribed, leaving many would-be investors without an allocation and forcing them into the secondary market once trading began, a dynamic that helped propel the early gains. SpaceX had taken the unusual step of courting retail investors, setting aside a far larger slice of the offering for ordinary shareholders than is typical for a listing of this scale.
Musk did little to dampen the mood before the opening bell, promising that SpaceX would take people to the Moon, Mars and beyond.
“This is a rally being driven as much by hype and scarcity as fundamentals,” said Susannah Streeter, chief investment strategist at Wealth Club. “With just over 4 per cent of the company’s shares made available to public investors, demand far outstripped supply, helping fuel this sizeable first-day pop.”
The surge has come despite SpaceX already carrying an eye-watering $1.75 trillion valuation, a price tag that, as CNBC reported ahead of the listing, made the rocket maker more valuable than Tesla before a single share had changed hands. Friday’s gains raise the bar considerably, with an even bigger number now needing to be justified.
New investors are not so much buying today’s business as making a bet on how tomorrow’s world might evolve, a future built on reusable rockets, satellite connectivity and technologies that could transform how the world communicates, travels and lives. That faith persists despite the company revealing significant losses when it lifted the veil on its finances ahead of the float.
Central to the investment case is Starlink, now the company’s primary revenue engine. The satellite broadband network has passed 10 million active customers globally and is increasingly viewed as a global telecommunications platform rather than a niche connectivity service, one with growing relevance for British businesses, with Starlink poised to transform rural UK connectivity as the satellite race heats up.
Musk’s vision of mass space travel, his promise to take the fiction out of science fiction, has also stoked the excitement.
The challenge for SpaceX will be converting lofty expectations into consistent financial performance, and serious questions remain over whether the first-day gains can be sustained. Wall Street itself is divided: Fortune reported analysts split between hailing the listing as a “holy grail” and warning the valuation demands a leap of faith.
The real test will come in the months ahead as lock-up restrictions begin to expire and existing shareholders are free to sell. As more stock enters the market, the balance between supply and demand could shift markedly.
As so often during periods of market euphoria, the risks are taking a back seat. SpaceX’s ambitions are potentially transformative, but they are also highly capital-intensive and depend on technological breakthroughs, regulatory approvals and stable geopolitical conditions. One under-appreciated risk is the possibility of geopolitical tensions spilling into the space domain, with critical satellite infrastructure increasingly vulnerable to cyber-attacks, jamming or even direct anti-satellite military action.
For now, plenty of investors seem content to look past those concerns as they chase a stake in one of the world’s most closely watched companies, and join Musk on what they hope will be an historic rocket ride.
